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TMI Blog2018 (3) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... n medical equipments exempt from customs duty. 3. The petitioner-Hospitals imported certain medical equipments from out of India availing an exemption from customs duty under the said Notification. The said exemption was given to the petitioner-Hospitals from customs duty subject to the conditions as stipulated in the said Custom Notification No.64/88-Cus. dated 1.3.1988, which, inter alia, required the petitioner-Hospitals to provide free medical treatment on an average to 40% of outdoor patients and 10% of indoor patients. There were certain other conditions also in the said Custom Notification, which was issued on 1.3.1988 and was later rescinded on 1.3.1999. 4. The impugned order inter alia referring to the decision of the Division Bench of this Court dated 19.7.2011 in Writ Appeal Nos.2369-2370/1999 and other connected Writ Appeals [The Kasturba Medical College & Others Vs. The Union of India & Others] stated that since the petitioner-Hospitals did not file their Affidavits opting for an alternative scheme evolved by the Division Bench of this Court dated 19.7.2011 despite an opportunity given to them and they have failed to give relevant evidence before the Authority for ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or submitting the records. Since then none of the appellants/petitioners have submitted any documentary proof in support of the claim. The Petitioner had enjoyed the fiscal benefits of exemption given by the Notification No.64/88- Cus. dated 01.03.1988 at the time but did not abide by the Undertaking given in an affidavit at the time of issue of CDECs causing loss of revenue to the public ex-chequer. Therefore, this Directorate/Department of Health has come to the conclusion that all the CDECs issued to the above institutions are hereby withdrawn and cancelled. This issues with the approval of the competent authority. 5. It would be appropriate to quote the relevant portions of the judgment of Division Bench of this Court dated 19.7.2011 in Writ Appeal Nos.2369-2370/1999 and connected writ appeals by which painstakingly, the Division Bench of this Court headed by Hon'ble Mr. Justice J.S. Khehar, as his Lordship then was, examined all the relevant aspects of the matter and by way of a concession, evolved an alternative scheme for maintaining and continuing the exemption from customs duty given to these Hospitals, departing from the conditions relaxing them further as laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate to do away with free outpatients' treatment, since it is virtually impossible to verify records for such large number of patients, not only on the issue of their eligibility (under the original scheme), but also in respect of treatment rendered. In case of a shortfall in a particular year, the principle of carry-forward will be adopted, to provide free medical treatment to BPL card-holders, for the following years (including the years after the expiry of the period of 20 years), till the short fall is satisfied. In case, any of the hospitals have sister/peripheral hospital(s), it shall be open to such hospitals to satisfy the obligation of 20% free inpatient treatment, by providing medical treatment in any of their sister/peripheral hospital(s). Secondly, the original notification dated 01.03.1988 envisaged free treatment only for persons whose family income was less than Rs. 500/- per month. It may be difficult for hospitals to find even a few patients annually, who satisfy the aforesaid criteria. For the proposed alternative scheme, we consider it just and appropriate to extend the benefit of free medical treatment to all BPL (below poverty line) card- holders. The instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a decision thereon, in terms of the spirit of the original notification dated 01.03.1988, and the instant order, in consultation with the Additional Solicitor General of India. The Central Government shall take its decision, one way or the other, by 31.10.2011. 9. Such of the appellants/petitioners who desire to be governed by the proposed alternative scheme, shall file affidavits within four weeks from today, with the Director General, Health Services, Government of India, consenting to be governed by the proposed alternative scheme. Those of the appellants/petitioners who have filed an affidavit in the terms referred to herein-above, would not be proceeded against in furtherance of the earlier notification dated 01.03.1988. They would be entitled to the return of their machinery unconditionally; they would also be entitled to refund of customs duty, if any, deposited by them; all bonds and bank guarantees (or the like) shall be returned to the concerned parties on or before 31.12.2011, which will be deemed to have been cancelled on the exercise of option and the acceptance of the proposed alternative scheme. In sum and substance, the proceedings initiated against hospitals ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent-Deputy Director General (Medical) did not take into account the said reply and the explanation furnished by the petitioner and has illegally revoked the exemption from customs duty given to the petitioner revoking the CDECs as well. Aggrieved by that, the petitioners are before this Court. 9. The Learned counsel for the petitioner also relied upon certain judgments to support his contention that the principles of natural justice have been breached in the aforesaid manner and consequently, the impugned order deserves to be quashed. 10. On the other hand, the learned counsel for the respondent-Union of India, Ms.K.Sarojini Muthanna has supported the impugned order and has urged before the Court that the petitioners have failed to adduce any evidence before the concerned Authority for satisfying the conditions of exemption under the Notification No.64/88-Cus. dated 1.3.1988, despite an opportunity given to them and CDECs of 392 Institutions/Hospitals out of 396 beneficiant Institutions were revoked, who misused the said exemption from customs duty by not satisfying the conditions thereof by providing free medical treatment to the poor sections of the Society. 11. Though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2370/1999 and connected writ appeals, the petitioners, for the reasons best known to them, did not file their Affidavits giving their option for such alternative Scheme evolved by the Division Bench of this Court. There is no document on record to establish it nor it is a contention raised before this Court. That shows lack of bona fides on the part of the petitioners. It is equally unfortunate for the Union of India and the concerned Department or the Authority, who were to take a call and respond to the said alternative scheme evolved by the Division Bench of this Court, they maintained a stony silence in the matter, showing scant regard for the directions of this Court. 16. Be that as it may, the situation as per the terms of Division Bench's judgment in these circumstances thus reverted back to the conditions as stipulated in the Custom Notification No.64/88-Cus. dated 1.3.1988 and therefore, satisfying of the conditions of that Notification stricto sensu became sine qua non for the petitioners to establish before the concerned Authorities. 17. A bare perusal of the impugned order Annexure-A dated 23.1.2015, the relevant part of which is quoted above, would indicate that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or public revenue and to that extent, the public loses its money in favour of the beneficiary institutions. Therefore, it is all the more necessary that a strict, meticulous and complete compliance of conditions with the relevant and cogent evidence is proved beyond doubt before the concerned Authorities. A casual, cavalier or compliance by a paper formality is not enough to allow such Institutions to avail exemption under the said exemption notifications. The very purpose of such exemption will be defeated if the conditions are allowed to breached with impunity and then glossed over by a paper exercise in the name of submitting of a so-called reply furnished by the petitioner in the present case, Annexure-V dated 4.7.2014 , which does not inspire any confidence. The failure on the part of the petitioner to bring forth the said reply and the relevant data with evidence before the concerned Authority during the course of personal hearing on 5th and 6th of May 2014, speaks volumes against the petitioner-Institutions and shows the lackadaisical manner in which it sought to fortify its claim for exemption of customs duty in the aforesaid manner. 20. The gross abuse of customs duty exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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